Regional property demand holds the reins

Alongside the usual peaks and troughs, in 2022 the Victorian property market experienced eight interest rate rises and a confluence of pressures from the rental market.

Despite this, property in regional Victoria continues its strong performance. The Real Estate Institute of Victoria (REIV) December Quarterly Median Report reveals that regional Victorian house prices grew 8.0 per cent over the year to $610,000 while the annual median for Units and Apartments rose 6.5 per cent to $425,000.

Although the house prices in Metropolitan Melbourne saw a 3.3 per cent drop in the annual median (to $1,040,000), there are plenty of areas that continue to show value, with pockets of growth across the outer ring of the city.

Metropolitan Melbourne’s annual house price still sits above the million-dollar mark, but the quarterly price data shows opportunity for buyers as the median dipped to $974,500 (down 1.6 per cent) alongside Units and Apartments which saw a 2.6 per cent drop ($627,500).

House prices in Outer Melbourne grew 1.8 per cent to $830,000 over the 12-month period (up $14,500). From the fledgling western suburbs, Cobblebank reported one of the highest annual growths across the state – with an 18.5 per cent increase in median house price to $635,000.

Other suburbs in the west that recorded outstanding growth were Harkness, up 17.8 per cent ($625,000), Melton (up 11.5 per cent to $470,000) and Weir Views (10.8 per cent increase to $537,000) – remaining within the affordable bracket yet showing great investment potential for homeowners.

The standout regional suburbs for quarterly growth were Kyneton – which added an impressive $100,000 to its median house price (topping out at $1,040,000) and the historic town of Stawell, growing 8.7 per cent this quarter and 21 per cent annually (to $375,000).

The most affordable areas for hopeful house-hunters looking to lock down a Unit this quarter, resided in areas such as Carlton, down 30.7 per cent to $297,250, Dandenong (17.0 per cent drop to $357,000) and St Kilda East which saw a 12.2 per cent decrease, yet remained above the half a million mark ($511,600).

REIV President Andrew Meehan said the December data demonstrates good buying opportunities for Victorians and a resilient real estate market across the state.

“The drop we’ve seen in the median prices in Metro Melbourne must be seen in the context of the rapid price growth Victoria has recorded over the past two years,” Mr Meehan said.

“Property prices still remain higher than they were in December 2020 – the post-COVID real estate boom has placed Victorian property in a stronger position than ever before, a trend we continue to see across numerous suburbs in metro Melbourne and our regional areas.

“Now, as we enter the new year and the immigration levels return, we will no doubt see continuous demand in the market as Melbourne’s population grows and investors see strong potential for growth in our state.”